Technology for a Sustainable Tomorrow

Vik Rao, Senior Vice President and Chief Technology Officer, Halliburton

Editor’s note: This is the last installment in a yearlong series designed to stimulate discussion in research and development. The series is one of several actions taken by the SPE R&D Advisory Committee to encourage R&D development and discussion. Please send any questions, comments, or ideas to vik.rao@halliburton.com.

The oil and gas industry faces an interesting future, likely in unprecedented fashion. Peak-oil theorists have surfaced from time to time, so the current discussion of that topic is not new. But what is new is that we are in a demand environment driven by the economies of China and India, with sustained growth and no signs of letting up. Additionally, anthropogenic origins of global warming are acquiring currency to the point where all the major oil companies now state their support for curbing CO2 emissions. All these elements converge to paint a very different picture of the energy world than ever before, one in which serious consideration is given to potential sources of energy previously regarded as mere fanciful conjecture, such as transport liquids from grass. The debate is no longer about producing enough energy to meet demand, but about producing hydrocarbons and energy in a sustainable manner. At the same time, it is also about producing more environmentally friendly fluids for transportation and power.

Fig. 1 shows the Energyfiles estimate of future oil production, demonstrating the decline in conventional oil production with the shortfall made up by unconventional hydrocarbons and synthetic sources. Regardless of the accuracy of this estimate, it is clear that the industry will respond with a multipronged effort that will include the following elements.

Fig. 1—Estimate of future oil production showing the decline in conventional oil with the shortfall made up by unconventional hydrocarbons and synthetic sources.

Increasing Ultimate Recoveries. In his April 2006 “Technology Tomorrow” article in JPT, Nansen Saleri of Saudi Aramco estimated that a modest increase in ultimate recoveries would provide 1 trillion bbl of hydrocarbons. He also suggested that the road to this goal would be paved by advances in reservoir understanding, intelligent wells, and improved lift. The most intriguing of his proposals is that of advanced understanding of the physical and chemical processes at the pore throats, going so far as to suggest that the breakthroughs here could be akin to the promise of stem cell research in the study of curing human diseases. An effort such as that will need more active involvement from the scientific community. This call to scientific arms needs to be taken up by petroleum engineering departments everywhere, in particular by seeking collaboration with basic science departments. I anticipate lively debate on this topic at the SPE Research and Development (R&D) Conference on 26–27 April in San Antonio. Furthermore, the R&D Advisory Committee is organizing a session at the American Assn. for the Advancement of Science (AAAS) regional meeting to be dedicated to a discussion of the challenges facing our industry, with the objective of exciting the imagination of the basic scientists assembled. We hope that the deliberations will be of sufficient value to merit a report in the AAAS flagship journal Science. The AAAS meeting will be held 18–21 April at the U. of Houston Clear Lake campus.

Increasing ultimate recoveries will be facilitated by better “illumination” of the reservoir, combined with more effective drilling methods to steer through the sweet spots and deeper-reading formation-evaluation sensors. The illumination means simply getting more granularity on the petrophysical definition of reservoirs. In his November 2006 Technology Tomorrow article in JPT, Ramanan Krishnamoorti of the U. of Houston offered ideas for sensing using nanotechnology materials. He discussed in detail the unique properties of these materials compared with their bulk analogs and the manner in which these may be harnessed. He will be expanding on these views at the SPE R&D Conference, which also will include a discussion by Jeffrey Grossman of the U. of California–Berkeley on advances in micro- and nanodevices for sensing. Both of the foregoing could play a part in sensing formation properties deep in the reservoir, offering the promise of near-wellbore accuracy at depths previously offered only by low-resolution seismic.

Unconventional Hydrocarbons. As demonstrated in Fig. 1, this category of hydrocarbons will play a significant role in future supply. As noted by Roy Long of the U.S. Dept. of Energy in the August 2006 JPT, unconventional hydrocarbons can include conventional fluid types in unconventional geologic settings. For example, tight gas is conventional natural gas but in formations with permeability many orders of magnitude lower than conventional. While this presents engineering challenges, extensions of current techniques appear to get the job done. Extraheavy oil and shale oil, however, have molecular makeups that require innovation for cost-effective recovery. I discussed this in detail in the February 2006 Technology Tomorrow installment, including the fact that one of the most significant hurdles to extraheavy-oil production is the hydrogen deficit in comparison with conventional oil. Furthermore, the recovery of these fluids is forcing a blurring of the lines between the traditional upstream, midstream, and downstream sectors in the business, such as in the monetization of stranded gas using liquefied-natural-gas methods. The SPE R&D Conference will devote an entire session to “Unlocking the Molecules,” discussing the in-situ molecular manipulation that may be necessary to produce some of these unusual hydrocarbons usefully.

Green Energy. Francesca de Ferra of Eni uses this term in her April 2007 article in JPT on the potential for biotechnology in the energy game, and it neatly sums up the interesting new issues facing the industry today, including addressing alternative, cleaner-burning fuels; environmental friendliness; and CO2 abatement in particular. Her views will be discussed in the “Innovations From Outside the Oil and Gas Industry” session at the SPE R&D Conference. In her article, she notes that bacterial degradation is responsible for much of the oil that is poor quality, such as that of the Canadian tar sands. She then offers the intriguing possibility of in-situ molecular conversions using bugs, and possibly even genetically modified designer bugs, with the caveat that any such radical activity would face the issue of industry acceptance, especially in Europe. However, the true power of bioengineering is likely to manifest itself first in the area of biofuels, and possibly in gene modification and metabolic engineering of biocatalysts used in the manufacture of biofuels. In the more economically desirable field of biofuels from switchgrass, bagasse, and the like, as opposed to the easier ethanol from sugar cane and corn, superior enzymes and bacterial strains may be needed for commercial feasibility. This possibly highlights to the greatest extent the industry’s core competencies required for a sustainable energy future. While there is a smattering of research in areas such as genetic modification of guar to yield a superior mannose/galactose ratio (for improved hydraulic-fracturing gels), these are currently the exception. In the future, process chemistry will play a larger role, as will biochemistry. This decidedly is the case when you consider the likelihood of significant volumes of fuel from the liquefaction of carbonaceous material—heavy-oil residues such as petroleum coke, but also likely low-grade coal, which is abundant but not well suited to direct combustion or metallurgical applications.

Some of the activity noted above is directed to a net reduction in CO2 emissions. In the June 2006 JPT, Richard Pike of the Royal Society of Chemistry reviewed the chemistry of carbon capture and storage. Since then, the issue has come into greater focus with a strong consensus reflecting the belief that global warming is a direct result of anthropogenic carbon emissions. The oil and gas industry is faced with the realization that in the near term it may well be the only avenue for CO2 storage. Not only may the gas be used for enhanced oil recovery, but the most evaluated methods are storage in depleted gas reservoirs and saline aquifers, with an example of the latter the Sleipner field in the North Sea, where about a million tonnes of CO2 per year is being sequestered in a brine aquifer. The Weyburn field in Canada is one of the most closely watched experiments in carbon capture and storage, wherein enhanced oil recovery and CO2 storage are taking place simultaneously. In his article, Pike outlines the challenges remaining, including selecting the best formations, with minimal leakage, and, most intriguingly, producing useful -compounds using CO2, including mimicking photochemical processes.

The SPE R&D Advisory Committee sanctioned this author to oversee the Technology Tomorrow column in JPT for a year to develop awareness of the exciting opportunities for research and development in the oil and gas business. This is the last article in the series, and the committee’s intent was for the series to end in the same month as the first R&D Conference ever held by SPE, which will be held 26–27 April in San Antonio, Texas. At the conference, far-reaching discussions are anticipated in analyzing the premise that innovative research will be essential for a sustainable tomorrow. This truly is a scientific call to arms by an essential industry.

Vik Rao is Senior Vice President and Chief Technology Officer for Halliburton. Rao previously held executive management positions in research and development, product launch, reservoir studies, and sales and marketing. He joined the company in 1974 as a senior research engineer. Rao serves as a Director on the Boards of Fiberspar Inc. and Prime Photonics Inc. He also serves on the Advisory Boards of KaDa Research Inc., PointCross Inc., the U. of Houston School of Engineering, the U. of Texas at Austin Petroleum Engineering Dept., and Zebra Imaging Inc. Rao is the author of more than 20 publications and has been awarded more than 15 patents. He earned a BS degree in engineering from the Indian Inst. of Technology in Madras, India, and MS and PhD degrees in engineering from Stanford U.